When Spending Thousands is a Drop in the Bucket

One day I was driving home from a beach run (why do a lot of my stories start out that way?). On the radio the DJ was going off about the cost of Beyonce’s baby’s first birthday party. Apparently it cost a whopping $200,000!!!

They detailed the specifics, like a diamond-encrusted Barbie doll that cost $80,000, and $95,000 for pink and white roses for the party.

I started to curse while driving in my old shitty Subaru, that that was absurd and ridiculous…but then a couple of thoughts occurred to me:

Spending that much on a birthday party, especially for someone who will never remember a single detail, is relative to the income of both her and Jay-Z.

If they have that much money, shouldn’t they feel somewhat obligated to spend it to keep the economy going and help businesses?

My first point is about how relative the cost of their party is to their income. I have no idea what those two bring in every year, but in one quick google search, it is estimated that Miss. Beyonce makes $140,000/day (feel free to run and grab a tissue and sob if you need to). And that’s just her! If I made that in TWO YEARS I’d be a happy camper.

Can you imagine (well actually yes I can “imagine” it thankyouverymuch)?!

Let’s just say one day in Beyonce’s life pretty much paid for her daughter’s birthday. All in all, that’s probably a much lower percentage than we may be spending for our own kid’s birthday parties, even with 99 cent store party favors, or going out to drinks to celebrate a friend’s birthday.

But just because they have the money, does that mean they should spend it?

The second point involves how their money might help the economy. You always hear how we should spend money to stimulate the economy, but my frugal ass is thinkin’, “hmph, you go right ahead with your spendy selves. I’m going to stay home and watch Netflix.”

But think of it this way: what if you were an up and coming designer, and somehow Beyonce heard about you and now she wants to give you $5000 to create a dress for her daughter. I’d say that was pretty cool! Who wouldn’t want that opportunity?

Or B’s people (because it’s not like she is reading Yelp reviews) researched and found a cake maker in a tiny hole in the wall shop in Compton, who they decided to give $30,000 to his or her business for the ultimate birthday cake.

Then there are the flower people, valets, performers, caterers, etc., who even if it’s a little, benefit from a huge birthday extravaganza. It’s not like I could afford to hire those people for a birthday party.

If Beyonce and others like her in her position didn’t spend that kind of money left and right, then would a lot of these small business suffer?

But then again, what would Warren Buffett think about a $200,000 birthday party for a 1-year-old?

And then there are those celebs who spend their millions so carelessly on stupid stuff, that they end up in ruins (I’m looking at you MC Hammer!), or use their money to abuse their power (what up Naomi Campbell! Hey put that phone down!)

What do you all think? If you made mega millions, would you spend it on extravagant things, or would you try to remain a rather conscious and frugal spender as to not “waste” on stuff that isn’t really necessary?

Just the other day, Mr. PoP and I were joking about what we would do if we made a really sweet profit on a property investment we had. (Profit in the range of $200K – definitely not Beyonce profit!) He said “I’ll go out and buy a rolex, and you don’t get to veto it!” I laughed, because it’s so true. If I had a choice I would veto it because I probably wouldn’t buy anything crazy. That is, except freedom. $200K is a few years that we wouldn’t have to work! =D

200k would be such a huge help to me…and dispersed responsibly among my accounts…save for maybe one tiny vacation. 🙂

Guest

A few years ago, my ex won the lottery (a big one) and he ended up donating a significant amount to the tsunami that hit Asia. He still lives modestly, though now he coaches soccer for the love of it rather than having to work. I’d like to think I would end up like that, as well, but who knows unless I’m in that position. I loved how you called out MC Hammer ha ha

Wow awesome! He sounds like a great guy with a good head on his shoulders!

Mackenzie Randompath

$200,000 on a 1 year old’s birthday party that they aren’t even going to remember? Wow…
I just think celebrities operate on a whole different quadrant, seriously. Beyonce’ has been a celebrity since she was teenager, so for half her life she has had some serious dough. Money changes people.
LOL, on the Naomi Campbell thing. Ha! I had forgotten about that 🙂

If I made mega millions, I would probably upgrade a few things in my life, but I wouldn’t go all crazy, and waste my money on stuff like a diamond encrusted Barbie. Seriously?!?!?! It’s as if they have so much money so they don’t know what to do with it, so let’s blow it all because it won’t matter anyway. Just because you have something in abundance doesn’t mean you should waste it.

Aside from charities I think I’d spend my money on experiences like traveling. But who knows I’m sure I’ll never be in a position to worry about it.

ctfd

This is why I look at my budget in percentages to help me mentally comprehend my income. Jay-Z & Beyonce’s annual combined income is roughly $78 million. This $200K birthday party makes up 0% of their annual income. This is literally pennies to them.

Personally I agree with you. Who even makes a diamond encrusted Barbie?

Andre Brown

I find this topic very interesting. I’ve thought about similar situations. I remember one time someone pulled up to me in a car that was $60k+ and I was like, “wow, how could they spend so much money on a car.” Then, I drove a little bit further and there was someone who’s car was barely operating next to me. They easily could have looked over at my Toyota Corolla and say “wow, how could they spend so much money on a car.” We are all at different levels and while some things may seem absurd to us, there may be things that we do that are absurd to them!

I’m not saying I agree or disagree, but I have had a few instances in life that even with my humble living, have put me in my place!

I don’t think wasting money on diamond encrusted anything is a good idea. I don’t care how many millions you got. I think Warren Buffet has a pretty good idea on how to spend his money and he has a lot more than Beyonce! Then again, I have been poor all my life so maybe I have a different mindset.

I see where you’re coming from here, and it does make sense. If B & Jay-Z were money hoarders – if that entire class was comprised of money hoarders – it could hurt the economy, especially the luxury industry that caters to that kind of stuff. They are their own economic stimulus, I suppose 🙂

I think it all depends. If they hoarded all the money that they made, I don’t know if that would be the greatest for the economy. I’m sure $200K is like nothing to them anyways! I wish my life were like that haha

I’m not sure hoarding would be the answer for sure, but it does seem somewhat ridiculous. Maybe if it was that kind of party but also a benefit for children’s hospital, then it would be worth it. Maybe they did that. Who knows!

I heard the same thing and it drove me absolutely crazy! If I had that much money, there is no way I would get that petty or crazy with it. You’ve got to remember your roots.

Despite what people think about Warren Buffett or Bill Gates, one of the things I always respected about both of them was that they continued to live very modestly even after making such huge fortunes. That’s the way to go.

If I made mega millions… hmm… There are a lot of projects I’d like to fund and I think that that is where a lot of my money would go (after ensuring my own financial freedom, of course). So, I probably wouldn’t go buy $50k dresses or jewellery, but I would love to fund an independent game studio or jump start a new technology, for example. Maybe they’d name a character after me!

Well they should! I like the idea of a foundation or something. Maybe educate young girls on personal finance. OK I guess it doesn’t take millions to do that if I wanted to. I used to work in video games by the way. 🙂

This is a tough one. I’d like to think that if I ever came into mega money or over time become a millionaire or something I’d spend my money wisely and not waste it on crap like a diamond barbies but loads of money does strange things to ones thought process. Especially when it’s a situation like entertainment industry they make their money quite easily (and when I say easy I mean marketing a set skill) rather than say, warren buffet who is a hard working money genius. Their perception of a thousand dollars would likely be very different.

I suppose that it’s all relative. People in other countries making a couple of dollars per day probably look at the average American the same way. There are lots of people who can’t afford food or water, let alone a television.

They probably would think we were spend thrifts for watering our lawns, using water to flush toilets or using our electricity for mindless entertainment.

I’d like to think that if I had that kind of money I’d use it to make more money (and of course donate a large portion of it, but that’s not part of the rules) 🙂

I think you’re so right about that! It is relative. I think about that when it comes to food. How much I eat or snack when I don’t need to when people don’t have that luxury.

Allison @InsomniacLabRat

A diamond encrusted Barbie just sounds ridiculous to me, but considering their income, I don’t think spending thousands of dollars on a birthday party is that crazy if it’s a once in a while thing. I have no idea how they spend their money otherwise, but even if the daughter won’t remember the party, why not go “all out” and spend a whole day’s income on a party once a year?

Again, I don’t have any idea how they normally handle their finances, but generally speaking, I don’t think it’s bad for people to splurge – as long as it isn’t putting you deeply in debt (which it doesn’t sound like is the case for this party)

I can see both sides. I don’t think Beyonce or Jay Z grew up with much, and they seem to be smart business people with other income streams besides their entertainment careers. If they want to spend $200K on a birthday party, they can afford it. I would be more worried that my child would grow up and be a spoiled brat who contributes nothing to society, but I guess that is a problem of any wealthy family trying to raise a child. I sometimes wonder if we are spoiling our daughter. She has already been to way more places and has lots more money in a college fund and retirement account than I could have ever though about. Will she appreciate the value of a dollar? I also bet many of those ridiculous things that celebrity children receive are comps from the companies who want their product mentioned. Who am I to say what is right and wrong, but a diamond Barbie does seem a bit extreme.

Ornella

I agree she may have gone a bit overboard but if I had the money I’d probably be a combination of both. There are things I’d be like heck no I won’t buy that but we all have our little splurges and loves that given the option would pay top dollar on it. So it just depends on what is your thing, New parents have a way of going way over the top with everything not just birthday parties but EVERYTHING! They’re excited and happy and you lose it sometimes when you get so pumped up.

I think that there’s a balance somewhere… but deciding where is the tricky part! That money will definitely have kept the economy going, but could it have been spent even more effectively for the economy, on something other than that barbie doll?!
I enjoy being able to support local businesses, now that I have more disposable income. That is to say, it’s not that I dislike supporting large retailers, just that it is so much easier to observe the impact when it is small businesses.

Great post.. I love the point you make about spending to help the economy. Even more importantly, I think more of us should spend money locally to help our own countries and local economies in these hard times 🙂

If I had megamillions, hmm I don’t think I would just blow it on lavish things, but then again, that’s really hard to say. I’d like to think I wouldn’t and do better things with my money like get involved with charities and do good, but I’m sure I would make a few ridiculous purchases too.

moneybulldog

I’ve honestly never thought about it from that angle, should they feel obilged to spend their cash to help the economy. Maybe someone should mention this to Apple & Microsoft!

Fascinating questions. While we definitely don’t spend $200k on birthday parties for our girls, I think we spend a generous amount. But as you mentioned, it’s relative to the amount of money my husband and I earn. If we earned less, we’d spend less. If we earned what Beyonce and Jay-Z do, maybe we’d spend the same. It does seem over the top for a child who will have no recollection of the event. But, as long as they’re not being careless (a la Hammer time) then who am I to judge? To me, it’s more important that they teach their daughter how blessed she is, how to use the money she will inherit/earn wisely and how to use her wealth to live her dreams and help others live theirs.

I like that the spending mega-rich people do helps stimulate the economy. But, little Blue Ivy just looks cute, and does poopies in her diaper. It’s ridiculous to spend that kind of money on an infant. Be honest Beyonce, it was just a great excuse to have some friends over and drink some Courvoisier Gold.

Love this post! I hate when I hear about celebrities and their crazy extravagances….but then again, as you said, it’s DROPS in the bucket, PENNIES of their net worth….so who is to say whether it’s right or wrong? If you have it and it’s not hurting anyone, why not? If I had that much money, I would pay off debt, travel and donate. I don’t need things, just experiences. I am a bit disappointed. I thought Bey and J wouldn’t be like that….but isn’t that what most celebrities do? I think it’s all relative and in some way we are all keeping up with the Joneses, whoever they are.

I guess I`d probably have an entirely different lifestyle that I have now, but I think that I would spend more money on experiences, such as travelling the world, than on material things. Allthough, A chanel 2.55 would be hanging on my shoulder. All in all, I think if I had that much money I`d use it in a sensible way, and in a productive way. I`d experience the world, I´d like to invest in small businesses, and I`d make sure that my family never had to worry about money ever again.

addvodka

I’d like to think that people with this amount of money spend it in mom-and-pop shops and smaller companies that can greatly benefit from their loads of cash, but I don’t think this always happens. I’m bias because I LOVE Beyonce and Jay-z, lol.

$200k on a baby’s first birthday completely boggles my mind. I can’t wrap my head around that at all. Even if I hit the lottery, I just cant seem to see myself spending that kind of money on something so frivolous.

vinaeco

Cool post but might be worth checking out the MC Hammer facts.. as I understand it he spent a lot of that money giving back to the people from the place he grew up in. He’s actually a super savvy business operator who is now heavily involved in the startup scene. Check out this interview http://www.youtube.com/watch?v=9nJt5WVbAI0

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